UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Accounting and Auditing Enforcement Release No. 1132 / May 3, 1999

United States v. Herbert Emanuel Woll 1:99-CR-25

SEC Defendant Indicted For Perjury Committed During SEC Investigation

The Securities and Exchange Commission ("SEC") announced that on April 14, 1999, the U.S. Attorneys Office in Chattanooga, Tennessee obtained an indictment alleging that Herbert Woll ("Woll"), a resident of Marietta, Georgia, committed perjury during his sworn testimony before an officer of the SEC. The testimony was offered by Woll during the course of an SEC investigation that led to a pending civil action, SEC v. Mohamed Khairy Mohamed Zayed, II, Michael W. Rehtorik, and Herbert Woll, C.P.A. (E.D. Tenn., Civil Action No.1:98-CV-327 Judge Edgar, filed September 24, 1998).

The SEC filed civil fraud charges against two former officers of Genesis International Financial Services, Inc. ("Genesis"), Mohamed Khairy Mohamed Zayed, II ("Zayed") and Michael W. Rehtorik ("Rehtorik"), and its former accountant, Woll, for their roles in an illegal "pump and dump" scheme involving Genesis stock. In its complaint, the SEC alleged that Zayed, Rehtorik and Woll engaged in securities fraud in the promotion and sale of the Genesis stock by using fraudulent financial statements and press releases calculated to deceive prospective investors. Woll, a certified public accountant, was named as a defendant in the SEC litigation for his actions in preparing the fraudulent financial documents for Genesis. On April 30, 1997, before filing its civil action, the SEC issued an order temporarily suspending the trading of the securities of Genesis, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the "Exchange Act").

According to the indictment returned on April 14, 1999, Woll committed perjury in response to questions relating to his personal criminal history. Specifically, when questioned by an SEC officer, Woll knowingly provided false testimony by failing to reveal that his criminal history included several arrests and convictions.

The SECs case, which involves violations of the antifraud provisions, Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder by Woll, Zayed and Rehtorik, is currently ongoing in the Tennessee district court. For additional information about the SECs suspension and litigation case, see SEC Release No, 38565 (May 1, 1997), Litigation Release No. 15907 (September 24, 1998), and Accounting and Auditing Enforcement Release No. 1081 (September 24, 1998).